November 13, 2022

Stocks followed through higher on Friday as Thursday's upbeat news on inflation kept the market aglow. Positives included above-average Nasdaq volume and a firm broad market.

It was the best two-day Nasdaq showing since '00. Short- and intermediate-term trends are now up, as price dispensed with the 20 ema and the 50 ma.

Both dollar and bond yields fell in bullish fashion, supporting the move in equities.

I would not expect growth stocks to lead, but we keep our minds open to anything. The semis were especially impressive, including institutional favorites Advanced Micro Devices (AMD) and Nvidia (NVDA).

But the overall picture remains the same: a market devoid of pattern setups for us to sink our teeth into.

Check the Focus List for a System P trade for Monday. The system is in beta test mode, so please trade accordingly, if at all.

I will be out of the office for the whole day on Monday and may not post a report until late at night, if at all. At minimum, please check the Watch List file which will be updated.

System P

I discovered in testing this system that I was using an incorrect means of trend determination. I got this straightened out a week ago and restated the results below (expressed in terms of R) to reflect the correct method. A few winners were negated and the one loser was as well. The results are as follows.

The definition of a winner is whether the stock price rises 1%-1.5%, which would equate to roughly 10%-15% for the options. Many positions will be exited in 3-5 days, or less. If a position does not move in two days, it should be exited. A reasonable goal is to target 2%-5% wins.

10/06/22              ASND            1
11/03/22              ACN               1
11/03/22              CHTR             1
11/03/22              HD                 1
11/03/22              PEP                1
11/11/22              AAPL              1
11/11/22              ACN               1
11/11/22              ADBE             1
11/11/22              CRM               1

In summation, we remain in defensive mode.

Kevin Marder

Trading Lessons
Introduction to the service (38:00)
Money management and risk management (20:27)
Bread and butter pullback (11:10)
Bread and butter pullback: Pt II (15:09)
Bread and butter pullback: Pt III (31:48)
Bread and butter pullback: Pt IV (30:16)
Bread and butter pullback: Pt V (1:41)
System R
Short-selling (25:53)
Wyckoff spring reversal (2:30) 
5-minute breakup test (8:01)
Screens (21:03)
System P (new)